THE Court of Tax Appeal (CTA) granted the tax refund claim of SM Investments Corp. of P296.2 million of unutilized creditable withholding tax (CWT) for the calendar year 2014.

In a 12-page resolution on March 11, the court’s third division ordered the Bureau of Internal Revenue (BIR) to refund or issue a tax credit certificate representing the company’s excess CWT for 2014.

The appellate court said that the CWT certificate issued by the commissioner of the Bureau of Internal Revenue contained the wrong taxpayer identification number (TIN) of the company and also contained erasures that were not properly countersigned.

The case was based on the company’s appeal to the tax court to reconsider its ruling in 2020 that partially granted P289.8 million of excess CWT.

“Petitioner has sufficiently proven its entitlement to the refund or issuance of a tax credit certificate, representing unutilized excess creditable withholding tax for 2014 in the modified amount of P296.2 million,” the court said in its ruling written by Associate Justice and CTA Third Division Chairperson Erlinda P. Uy.

The commissioner of the BIR, in an appeal for partial reconsideration, said that the company failed to “exhaust administrative remedies” before bringing the case to court in the division. The CTA rejected the appeal and said that the petitioner timely filed its judicial claim, as the country’s tax code provides the appeal to be filed within two years of the tax penalty.

“In this case, there is no showing that respondent ever acted on petitioner’s administrative claim for a refund from the time it was filed on Sept. 21, 2015, up to the filing of its judicial claim on April 7, 2017, when the two-year prescriptive period is about to end,” the court noted.

It reiterated that the company was correct to have elevated the claim for refund before the expiration of the two-year prescriptive period mandated by the tax code.

The court also disagreed with the respondent’s claim that the company’s failure to submit proof of remittances was fatal to the claim for refund.

“Further, it bears emphasis that the payee-refund claimant, such as petitioner in this case, need only prove the fat of withholding taxes, which is established by a copy of the withholding tax statement; and not its actual remittance to the BIR.” — John Victor D. Ordoñez